Another day, another Cassandra-come-lately. Today we hear from Patrick Anderson, CEO of the Anderson Economic Group, who tells the Detroit News that the automotive market cannot support three Detroit car companies. “2008 marks the year when it became apparent to everyone that (providing products at a loss to maintain market share and keep plants at capacity) not possible. The days of zero-percent financing on a vehicle that was sold at a loss are over.” Anderson is unsurprisingly bearish on Chrysler, admitting that Auburn Hills is “not going to sit around and lose money for the next five years. They will consider auction and Chapter 11.” Of course, like so many of the grudging doomsayers recently emerging from the woodwork, Anderson somehow believes that an auction is preferable to a bankruptcy. “A merger of some type is likely to occur because the economics now are unsustainable for three Detroit automakers,” says Anderson, while admitting that “there is no scenario where GM and Chrysler avoid significant reductions in employment — none.” The real question is how close to the 70k expected losses will the final tally be. And whether a bail-and-merge would save any more of them than a bankruptcy. And how much that bail-and-merge might cost. And whether American Leyland will have any success. And on. And on.
Who is Cassandra and why are we watching her?
Cassandra is a character from Greek mythology. The god Apollo was in love with her, but she spurned his advances. So he gave her the gift of prophecy, but then said that no one would ever believe her, even though her prophecies were true.
I’m guessing that this site has a Cassandra Watch because it has long been predicting some variation of the scenario that is now unfolding, but Big Three management, the UAW, the mainstream news media and business press have refused to believe that anything remotely this bad could happen.
One could also label this series the Ostrich Watch.
Thank you, geeber!!! Very enlightening!
Never was the literature freak in school. Grammar, though, was easy for me for some reason. Being a regular freak was, too.
geeb, I just now read the last line of your post. Good thing I wasn’t drinking anything; it would have come out my nose!!!